Dáil Éireann Debate, Thursday - 22 September 2022
221. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which borrowing levels in this country comply with the requirements of those lending institutions to which Ireland appealed during the financial crisis whilst a programmed country; and if he will make a statement on the matter. [46534/22]
Amharc ar fhreagraThe EU-IMF financial assistance programme for Ireland, formally agreed in late 2010, was a joint financing package in the amount of €85 billion and was made up of contributions from the International Monetary Fund (IMF), the European Union (EU), bilateral loans from the United Kingdom (UK), Sweden and Denmark, and Ireland own resources.
The €85 billion programme was financed as follows:
- €22.5 billion was provided by the IMF.
- from EU partners, the European Financial Stabilisation Mechanism) (EFSM) provided €22.5 billion and the European Financial Stability Facility (EFSF) €18.4 billion.
- €4.8 billion was provided by bilateral loans from UK, Sweden and Denmark.
- €17.5 billion was sourced from Ireland’s own resources (treasury and national pension reserve fund).
In December 2013, Ireland successfully exited the EU-IMF financial assistance programme, with the vast majority of policy conditions under the programme substantially fulfilled and market confidence restored.
Ireland’s loans from the IMF, together with the bilateral loans from Sweden, Denmark and the UK, have subsequently been repaid in full.
With the IMF and bilateral loans now fully repaid, four of the six loans that made up the programme of financial assistance are now repaid. The remaining programme-related debt is as follows:
- EFSM: €22.5 billion
- EFSF: €18.4 billion
While the programme loan agreements do not prescribe levels of borrowing or debt that Ireland must comply with, we will remain under Post Programme Surveillance until 75% of financial assistance has been repaid, which is expected to be in 2031. Under the repayment schedule, Ireland will finish repaying the remaining loans to the European Financial Stability Facility (EFSF) and European Financial Stabilisation Mechanism in 2042.
Sixteen Post Programme Surveillance missions to Ireland have taken place during this time, with the most recent mission having taken place in late March 2022. The Commission’s Staff Report for this mission was published in May.
Since the first mission to Ireland in early 2014, Post Programme Surveillance has marked the progress Ireland has made getting back on track after the EU-IMF programme. My officials and I consider Post Programme Surveillance to be an important ongoing two-way dialogue and partnership with the European institutions, the Commission and the European Central Bank as well as the European Stability Mechanism, which participates in the review missions for the purposes of its Early Warning System.
In the Post Programme Surveillance process, there generally is a high degree of consensus between the Irish authorities and the European institutions in relation to the challenges and risks facing Ireland, and it is beneficial to hear the views of the European institutions on an ongoing basis. In addition, the Commission’s staff report following each review mission is helpful, from the Irish authorities’ perspective, to hear an expert external view regarding some of the challenges and risks that we face as a country.
A key purpose of Post Programme Surveillance is to assess Ireland’s ability to repay outstanding programme loans. The Commission’s conclusions in its staff reports to date have been positive regarding Ireland’s capacity to repay. In this regard, the Commission most recent Staff Report for the 16th PPS concluded that the risks to Ireland’s capacity to service its debt to the EFSM and EFSF are low.
The 17th Post Programme Surveillance mission to Ireland is scheduled to take place in early October and I will continue to ensure that Ireland continues to fully comply with all Post Programme Surveillance obligations.
